Avoiding Inheritance Tax

The easiest way to avoid inheritance tax (IHT) is to make sure that you never give away any assets to your civil partner or children. Often people think that they are exempt because they are one of many beneficiaries on a family home. However, you do have to remember that if you are making a will then the civil partner or children are not exempt. Therefore you need to have an estate plan to make sure that all of your assets are properly protected.

Explaining what inheritance tax means, and why it applies to some gifts and not others, is very important. If you are still unsure, you should contact a professional advisor who will be able to help you. There are several rules to remember with this option that can become rather complicated if you are still married/divorced or still live in the UK. Therefore if you have no children, then avoiding inheritance tax won’t really be an issue.

You can make sure that you are not affected by this tax when you are making decisions about the future of your estate, your life insurance policies and your pensions. However, some situations might mean that you are actually exempt from IHT. When you die, your civil partner and children will be entitled to some of your assets, such as shares in the family business, your pension and so forth. The only time you will need to be aware of this is if you decide to make some minor changes to your life before you pass away. This is because you will need to make some provision for those assets that will be left after your death.

Of course there are situations where you will be affected by inheritance tax. One of these situations is where you die during the lifetime of a parent, grandparent or child. If you are married and both you and your surviving spouse live permanently with each other, then you are usually classed as a joint applicant for capital assets. This means that you and your spouse will both be taxed on the value of any assets that you both have accumulated over the years, regardless of whether they are in your name or not.

Another situation where you can be exempted from inheritance tax and that applies in the UK is when you make gifts to your dependents. In the UK, gifts to qualified written material or artistic creations are always exempt from IHT. If you are not sure what this means, then it’s best to consult a professional. You can make sure that you take all the necessary precautions when you give any gifts or pass them onto your children or family members and never try to hide anything when you do give. You may also find that the value of any gift that you make is less than that of any other asset, and this should always be taken into account when calculating your tax return.

When it comes to your assets and liabilities, you will find that you are generally classified as either married or single. If you are married, then you will be taxed on the value of your marital assets’ including property and assets held with your wife. If you are single, then you will be taxed on the value of any assets that you own individually, including shares in a company. However, you can defer income tax if you own assets which are beneficial to both your wife and yourself and you can claim an allowance for both purposes – this means that you can choose to pay more income tax for your wife than for yourself and use the allowance as an asset protection tool.